Why Consumers Will Always use Dealers

Factory-direct sales may seem like a good shortcut for consumers but, in fact, they only benefit automakers. It is a strategy being used to hurt dealers in the long run and an attempt to wipe them out. Some even predicted dealerships would not exist by 2025… sounds crazy right? 

Direct car buying is promoted as the most efficient way to buy a car, but it isn’t all that efficient. It is a waiting game after ordering, and you better believe they want a pretty penny up front to ensure the buyer’s commitment, which is non-refundable, of course. 

Dealerships provide the numbers and the vehicle all in the same day. Why is this so important? Well, the buyer knows exactly what they are getting. This becomes especially important if they have a trade-in and need to know what they’re getting for it before making a final purchase decision. Waiting for a vehicle to be built and delivered means numbers may fluctuate, and it most likely won’t be in favor of the buyer. Consumers also miss out on the discounts and deals that dealerships offer. And trade-in prices could change once the online retailer actually takes possession of the vehicle, which could affect financing options for the consumer.

Car manufacturing and car selling are two completely different things. Dealerships do so many things that make it effortless for carmakers such as:

• Provide most customer service
• Handle paperwork and financing
• Take care of maintenance, recalls, etc.
• Recycling vehicles (through used car/CPO sales and auctions)
• Assess what vehicles consumers in their specific area want/need and how much of it
• Take on the financial responsibility of managing inventory
• Take on responsibility of customer issues

It is quite silly to think that overnight, manufacturers can take on all of this and have it run just as smoothly as it does on a daily basis at a dealership, where they’ve been doing this for generations. If it were so easy, it would have already been done by now. 

Unfortunately, dealerships are still being framed as outdated and a waste of time, especially by online retailers like Carvana and Vroom. Truth be told, many dealers are running miles ahead by utilizing digital retailing, providing user-friendly websites, and having a streamlined purchase process. This saves consumers time and allows them to get the personal interaction they should get with large purchases like a vehicle.

Automakers that provide direct-to-consumer sales strongly advertise their “hassle-free” environment, suggesting that buying at a dealership would be a huge headache. But that is not the case. Dealers aren’t looking to hold customers hostage all day but instead, want to get them into a new vehicle quickly and with ease. As more consumers come in knowing what they want, most dealers shoot for a 2-hour buying process. 

The Alliance for Automotive Innovation would like you to think that new technology will be harder to showcase at dealerships. Ironically, it has been and will continue to be the place to learn, interact with, and attain knowledge about the latest automotive technology that is released. Electric, self-driving, and all there is to come will all be accessible at a dealership with staff nearby to help assist in whatever a buyer needs. Do you think consumers want to figure out how high-tech features work on their own, or do they want someone to show them how to fully utilize their new (major) purchase?

We know we can’t change what popular brands like Tesla and Rivian are doing, but we can advocate for what a dealership provides and what it stands for. As legislation moves forward with direct-to-consumer sales, dealerships can stay ahead by adhering to the many changes in the car-buying process, be consistent in serving their customer, and continue learning about digital retailing. While the online car buying industry is sure to grow, we are in no place to count dealers out. One thing direct sales will never have are personal, long-lasting relationships. People still look for that human interaction when it comes to big purchases. There is comfort in knowing you are being taken care of and being able to interact with experts and that is what dealerships strive for when serving their customers and community.

It stands true… “Don’t fix what isn’t broken.”